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ARTICLE · 11 APRIL 2023

Transfer Pricing Awareness Survey (March 2023)

KPMG in Nigeria
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The TP regime officially began in Nigeria with the release and implementation of the Income Tax Regulations No. 1, 2012.

NigeriaTax
Adewale Ajayi
Adewale Ajayi
Overview of TP Regime in Nigeria

Background

The TP regime officially began in Nigeria with the release and implementation of the Income Tax (Transfer Pricing) Regulations No. 1, 2012. Since then, the TP practice has evolved and is still evolving. In 2018, the FIRS published revised TP regulations and issued guidelines to close some gaps in the tax laws and promote better understanding and compliance with the regulations.

The TP compliance requirements in the revised regulations –the Income Tax (Transfer Pricing) Regulations, 2018 –align with the three-tier documentation approach recommended by the Organization for Economic Cooperation and Development (OECD). As such, taxpayers are required to maintain a master file and local file as well as the Country-by-Country (CbC) report. The latter is applicable where the taxpayer's consolidated group revenue is not less than the specified threshold. The Regulations also introduced stiff penalties for acts of

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